Progress – Moon of Alabama

June 7, 2006

Progress

Repealing the estate tax, which applies to large fortunes after death, would save a lot of money for a very few people — about one in 6,000, whose estates would each save an average of more than $800,000.

The Senate is expected to vote as early as Thursday on whether to repeal the estate tax permanently or to exempt more wealth and apply lower rates.
A Boon for the Richest in an Estate Tax Repeal, NYT, June 7, 2006

It is important to this people to grapple with the problems connected with the amassing of enormous fortunes, and the use of those fortunes, both corporate and individual, in business. […] As a matter of personal conviction, and without pretending to discuss the details or formulate the system, I feel that we shall ultimately have to consider the adoption of some such scheme as that of a progressive tax on all fortunes, beyond a certain amount, either given in life or devised or bequeathed upon death to any individual-a tax so framed as to put it out of the power of the owner of one of these enormous fortunes to hand on more than a certain amount to any one individual; the tax of course, to be imposed by the national and not the state government. Such taxation should, of course, be aimed merely at the inheritance or transmission in their entirety of those fortunes swollen beyond all healthy limits. Again, the national government must in some form exercise supervision over corporations engaged in interstate business-and all large corporations engaged in interstate business-whether by license or otherwise, so as to permit us to deal with the far reaching evils of overcapitalization.
"THE MAN WITH THE MUCK RAKE", T. Roosevelt, April 15, 1906

Posted by b on June 7, 2006 at 19:58 UTC | Permalink

Comments

gotta admire these jackals. they’ve created an inextricable fiscal crisis whose only solution is tax increases or the dissolution of the welfare state.
“poor people suck, anyways.” –cal coolidge.

Posted by: slothrop | Jun 7 2006 20:38 utc | 1

Excellent piece by Robert Reich from tompaine.com on repeal of the estate tax:

Thirty years ago, the richest 1 percent owned less than a fifth of America’s wealth. Now, according to a recent report by the Fed Reserve Board, they own more than a third. Not since the days of the robber barons of the 19th century have we seen this much wealth concentrated in so few hands.
Super-rich couples can now pass on $4 million to their heirs tax-free. Anything over $4 million is taxed at a 45 percent rate. Why, exactly, is it so important to repeal the estate tax altogether? Repeal will cost the Treasury nearly a trillion dollars in its first 10 years—more than the entire shortfall in Social Security. That means more federal debt or higher taxes on the middle class.
Those who argue for repeal say the estate tax discourages entrepreneurs. What? Passing on $4 million tax free to your kids is not enough incentive?
Talk about discouraging entrepreneurship. Repeal the estate tax and within a few decades control over America’s productive assets will be in the hands of non-productive Americans who never lifted a finger in their lives except to speed-dial their financial advisors.
People who inherit great wealth just because they’re lucky enough to have super-rich parents don’t have any particular incentive to be entrepreneurial. They don’t have any particular incentive to do anything. Giving them control over the American economy is like giving control over a Boeing 777 to teenagers with joysticks.

Posted by: conchita | Jun 7 2006 23:06 utc | 2

I think Reich focuses on a strawman argument to make his case against the concentration of wealth in the hands of the few.
Nobody claims that the heir will become more entrepreneurial as a result of inheritance. The argument is made rather to encourage a parent to be ‘entrepreneurial’ in order to accumulate wealth to pass on to heirs. In other words, if it will be taxed away after 4 million why bother making any more than 4 million.
The argument against concentration of wealth in the hands of the few should be based not on inheritance worthiness but rather on how the few are stealing from the many, [in the form of low wages and tax-funded corporate welfare and the elimination of public goods and services] in the process of accumulating the wealth that they pass on to heirs.

Posted by: gylangirl | Jun 8 2006 2:56 utc | 3

Good post, gylangirl.
Screw this worship of business boys bullshit.
I would only add to further points to yr. list:
1) Consider the political implications. You cannot have both a hereditary aristocracy & a political democracy. Even now the effing plutocrats are stepping in and taking over.
2) Let’s get practical. If those who have completely Plundered the Treasury are not going to make up the deficit, then it will have to be paid off by those of us who have been stolen from…Obvious. As I noted on the other thread this is what’s in the works. A 23-25% National Sales Tax.
(Another rationale for this is to “promote savings”. That’s like saying those swimming in 150 degree water are too hot. ie. people aren’t saving money, ‘cuz the Wall St. Predators have declared war on our wages since 1980 & are stealing & pocketing all the money for themselves. So, if you want to increase savings, increase goddamn pay & slash your bloody obscene profits.)

Posted by: jj | Jun 8 2006 3:18 utc | 4

Exactly.

Posted by: gylangirl | Jun 8 2006 3:31 utc | 5

i read an article quoting bill gates on this subject a few years ago. he said he is only leaving each of his children 10 million dollars. that death was a great time to give back to the society that provided you w/wealth.

Posted by: annie | Jun 8 2006 4:17 utc | 6

@annie:

Quite frankly, if Bill Gates really wants to impress people, he should shut down Microsoft and use the money to promote products written by people who actually do a good job, rather than employing shady business practices. This is not unlike hearing that George W. Bush plans to sign a law forbidding election fraud after the 2008 elections…

Posted by: The Truth Gets Vicious When You Corner It | Jun 8 2006 6:29 utc | 7

Progress not yet dead: U.S. Senate blocks permanent estate tax repeal

The U.S. Senate on Thursday killed a bill backed by President George W. Bush that would have permanently repealed estate taxes.
On a vote of 57-41, the Senate blocked consideration of a bill passed by the U.S. House of Representatives that would wipe out what Republicans call the “death tax.”
Republican backers had acknowledged they were short of votes for full repeal, but they had hoped to offer an alternative that would have reduced the tax rate and exempted all but the wealthiest estates from the tax.

Posted by: b | Jun 8 2006 17:30 utc | 8

U.S. Senate blocks permanent estate tax repeal
Ahhh, the grand shellgame in action.
Lucifer and Ahriman.
Steiner divides the devil into two beings.
Behold! Orthrus, mascot of the two-party system. At play.

Posted by: Uncle $cam | Jun 8 2006 18:29 utc | 9

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